Question 3

Civar Ltd is looking to introduce a new portable microwave oven to the kitchen appliances market. From reviewing the market, a price of 40 per microwave oven seems appropriate. At that price, marketing estimate that 50,000 new microwave ovens would be sold annually. To design, develop and produce these new blenders, an investment of 2m would be needed. Civar Ltd desires a 10% return on this investment.

Required

Calculate the target cost per microwave oven for Civar Ltd.

Question 5

State and illustrate the FOUR categories of cost associated with quality.

(Total: 8 marks)